Schindler Hldg Ag Akt

Good morning, ladies and gentlemen, and welcome to our third quarter 2024 results conference call. My name is Lars Bronson. I'm head of investor relations at Schindler. I'm here together with Silvio Napoli, our chairman and CEO, Paolo Campagna, our COO, and Carla De Geisler, our CFO. Silvio will provide a brief overview of the key messages this quarter. Paolo will discuss our market outlook and order intake in the quarter, and Carla will take us through the financials. After the presentation, we're happy to take your questions. We plan to close promptly at 11 o'clock. And with that, I hand over to Silvio. Silvio, please go ahead.

Thank you, Lars. Good morning, ladies and gentlemen. Thank you for joining us today for our Q3 24 results conference. Let me start looking back for a second here. Since 2022, when we started the journey we're on, investors and analysts, IEU, came out with the concept of self-help agenda. Well, today, with our Q3 results, we are pleased to report that we are continuing to progress on this self-help agenda. First and foremost, on profitability, our primary objective. For the seventh consecutive quarter, we are improving our year-on-year EBIT margin. With Q3 2024, we complement the continued bottom line improvement with top line progress. And this progress was achieved notwithstanding tough market conditions. On the one hand, the service and modernization markets continue to show robustness across the globe. On the other, and high markets present a mixed situation with China continuing to decline, but with other large markets, accelerating the growth india brazil and the middle east are the most prominent examples of this phenomenon and i'm sure we're going to come back to this later on in the market section now looking at our performance one of the highlights must be the takeoff of our modernization order intake with a plus 20 percent year-on-year increase in q3 2024 of course measured in local currency The other, if not the highlight, has to be our plan to launch a share buyback program in the magnitude of 100 million Swiss francs over a period of up to two years. This plan adds another dimension to our self-help agenda, which was so far focused on operational improvements. Allow me to say this also shows how we continue listening to you. to your suggestions on how to enhance value creation for our investors. Very important. We take this step while remaining faithful to our fundamental principle of preserving a strong balance sheet. And I'm convinced that this is all the more important today at a juncture where we have growing uncertainty across the board and also in terms of capital access and market fluctuations. Now, talking of principles, please allow me to step aside for a moment from financial results and express the fact that we were particularly pleased and allow me to say proud to realize that our progress was also recognized by external and non-financial institutions. And so we were honored that Schindler was ranked by Newsweek Statista as one of the top 10 world's most trustworthy companies in the machines and industrial equipment sector. For those of you who may not be familiar with the study, it is based on an independent survey of more than 70,000 participants and 230,000 evaluations from customers, investors, and employees, and also including extensive social media analytics. Similarly, Schindler was ranked as one of Time Magazine's World's 1000 Best Companies in 2024. And this ranking is based on a formula including employee satisfaction, revenue growth, as well as ESG KPIs. Now, before moving on, please allow me to add this. And this is to prevent any possible question or doubt. Schindler neither applied to nor paid for any of these studies. Now, back to our Q3 results, back to our progress. In Q3 2024, we recorded an order intake growth of plus 5.5% in local currency. This growth was consistent across all regions, with the exception of China. This progress in top line was also reflected in a revenue increase. In Q3 2024, Shindo delivered a growth of plus 2.6% in local currency. It is important to stress how this performance was achieved in spite of a massive and in fact accelerating foreign exchange impact, accounting for more than 300 million Swiss francs for the first nine months of the year. Moving on to the other highlight, and as I said, improving our profitability is our primary objective. And I'm pleased to report that Schindler delivered an EBIT margin of 11.7% in Q3 24. In terms of adjusted margin, the Q3 performance reached 12.6%, corresponding to 12.1%, excluding sale of assets. Finally, because cash is important, one more highlight of our progress is the significant operating cash flow improvement of plus 27%, driven by both the operating profit improvement I mentioned before and improvement in networking capital management. In conclusion, Schindler continues to progress and to deliver on commitments. Now, to take a closer look at the markets and our performance, I give the floor to Paolo Compagna, our Chief Operating Officer. Paolo, please.

Thank you, Silvio, and good morning, everyone. Before we move on to discuss our market outlook and our order performance, I would like to emphasize once more the fact that we are a predominantly service company with well over 60% of our revenue generated in the growing maintenance, repair, and modernization markets. While in terms of our exposure to the new installation business in China, this accounts for only 8% of our group revenue. With this introduction, I would like to move to our global E&E market outlook for 2024, which in our view remains unchanged by business and the region. The global installed base keeps growing at a healthy pace as the sizable NA volumes sold in previous years, in particular in Asia, are now being converted into service portfolio. In modernization, we have observed improved demand in the recent month in the U.S. and have decided to upgrade our full-year outlook for the Americas accordingly, while keeping it unchanged for the other regions. In China, an equipment renewal program worth 300 billion RMBs was introduced in July, which covers among different building technologies also elevators. This will help releasing some of the pent-up demand for elevator modernizations, but we have not yet observed any meaningful impact of this program as it is not yet fully effective in the most of the major cities. In Spain, the new ITC regulation, effective July 1st, could affect up to 40% of the country's 1 million elevators, with a total program cost estimated by the authorities of more than 700 million euro over the next seven years, which will include substantial outlays for equipment upgrades. In contrast, the mod market in Italy is coming off a peak, which was driven by various programs and incentives over the last years. A new installation, there's no major change in our market outlook for this year across all regions. The emerging markets that we have indicated before as bright spots in new installation continue to shine. In India, housing sales and launches have increased high single digit so far this year, driven by premium residential. While in Brazil, apartment launches increased this year up to close to 20%. over the past 12 months. In the US, the rate cut by the Fed last month resulted in an improved sentiment among homebuyers and a marked reduction in average mortgages. But it's yet to translate into increased housing supply and hence in high demand for elevators. In China, in spite of the stimulus packages announced by the government, we keep the three minuses for the energy market and we currently expect a mid-teens contraction in the E&E units sold this year. The measures introduced by the government are geared towards the absorption of the country's massive housing inventory, stabilizing home prices and improving customer sentiment, but have had no tangible impact on the construction of new housing so far. We continue to monitor very closely all announcements and developments on that front But the stimulus does look vastly different from the one from 15 years ago in terms of impact to our markets. Turning to slide number six, let's have a look on our or the intake performance in the third quarter. Our service portfolio units continue to expand at a healthy pace, driven by strong anti-conversions, in particular in China and Asia-Pacific, excluding China. I'm pleased to report that our modernization orders by value further accelerated globally in Q3, with double-digit growth across all regions, elevating our year-to-date modernization growth to more than 10%. Particular strength was observed in Northern Europe, as well as in both North and South Americas. Our global new installation order volume decreased by slightly more than 5% overall due to the weak market conditions in China. Year-to-date, our orders were down just only slightly. Our performance in the Americas was the highlight of the quarter, with both North and South America growing double digit, with solid growth recorded also in Asia Pacific, excluding China. In EMEA, our order intake declined low single digit in the quarter, and stays flat year-to-date. With that, I'd like to hand over to Carla to lead us through the financials.